In AIA Document A401, what is the standard payment period for subcontractor applications after the general contractor receives payment from the owner?
Correct Answer
B) 7 days
AIA A401 typically requires the contractor to pay subcontractors within 7 days after receiving payment from the owner for the subcontractor's work. This provision helps ensure prompt payment down the contracting chain.
Why This Is the Correct Answer
AIA Document A401 (Standard Form of Agreement Between Contractor and Subcontractor) establishes a 7-day payment period as the standard timeframe for subcontractor payment after the general contractor receives payment from the owner. This provision is designed to maintain cash flow throughout the construction payment chain and prevent delays that could harm subcontractors. The 7-day period balances the contractor's need for reasonable processing time with the subcontractor's need for prompt payment. This timing requirement is a fundamental aspect of the pay-when-paid provisions in construction contracts.
Why the Other Options Are Wrong
Option A: 5 days
5 days would be too restrictive and doesn't allow sufficient time for the general contractor to process payments and handle administrative requirements after receiving payment from the owner.
Option C: 10 days
10 days exceeds the standard AIA A401 requirement and would create unnecessary delays in the payment chain, potentially causing cash flow problems for subcontractors.
Option D: 14 days
14 days is too long and would violate the prompt payment principles established in AIA A401, creating undue hardship for subcontractors waiting for payment.
Memory Technique
Think 'Lucky 7' - AIA A401 gives subcontractors 7 lucky days to get paid after the GC receives payment from the owner
Reference Hint
AIA Contract Documents - specifically AIA A401 Standard Form of Agreement Between Contractor and Subcontractor, payment provisions section
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